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2201. The Doha Development Agenda: Tariffs and Trade

Publication Date:
08-2003
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
The opening of markets has boosted trade and economic growth worldwide in the past few decades. Yet tariffs – taxes imposed by importing countries on foreign goods – still remain a key obstacle to market access. The potential benefits of further reducing this obstacle are significant. OECD estimates indicate that scrapping all tariffs on merchandise trade and reducing trade costs by 1% of the value of trade worldwide would boost global welfare by more than USD 170 billion dollars a year. These gains would contribute a boost to regions around the world, adding the equivalent of up to 2% to the present annual gross domestic product (GDP) in some areas. No wonder that both developed and developing countries consider substantial tariff reductions as a central goal of the current multilateral trade talks in the World Trade Organization (WTO).
Topic:
Diplomacy, Economics, International Organization, International Trade and Finance, and Political Economy

2202. Economic Survey of euro area, 2003

Publication Date:
07-2003
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Entering its fifth year of existence, the European Economic and Monetary Union (EMU) has met major headwinds. At the advent of the single currency the euro area experienced solid economic growth, with unemployment falling and public finances rapidly improving. However, a number of structural problems were exposed with the cyclical downturn since 2001, from which the area is recovering only hesitantly. The challenges facing policy makers at present are both of a short-run and medium-run nature. Policy makers are currently grappling with sluggish demand. Responding to this challenge, monetary policy has been eased and fiscal policy reacted through the automatic stabilisers. However, the room for manoeuvre was reduced by lingering inflationary pressures and earlier insufficient fiscal adjustment in several member states. Meanwhile the euro exchange rate has appreciated significantly. Over the medium term, the Community has set ambitious targets and a vast programme for enhancing the performance of labour, product and financial markets. This programme needs to be pursued with vigour, thereby raising the odds of large gains in trend growth and jobs while making it easier to achieve sound fiscal positions.
Topic:
Diplomacy, Economics, International Organization, International Trade and Finance, and Political Economy
Political Geography:
Europe

2203. Economic Survey of France, 2003

Publication Date:
07-2003
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
After several years of rapid expansion, the French economy has entered into a period of below potential growth, with a negative output gap opening up. Monetary conditions have been relaxed, while fiscal policy has eased excessively, provoking the European Commission to initiate an excessive deficit procedure. As uncertainty dissipates towards the middle of this year, the economy should pick up speed, reaching a growth rhythm of around 2 per cent in 2004. Nevertheless, over the medium term, in the absence of substantial reforms the ageing of the population risks threatening economic and fiscal equilibrium. Current pension and healthcare reform initiatives and plans to redress spending over the medium term go in the right direction. However, in order to ensure medium and long-term fiscal sustainability, additional policies to slow the expansion of health and pension spending are required, while efforts to raise employment rates and potential output are needed to improve the economy's ability to finance future ageing-related expenditure. Here, programmes that offer the possibility of on-the-job training should be expanded so as to reactivate young and lowskilled workers, while reforms to early-retirement schemes and the pension system need to be continued so as to restore work incentives for older workers. Ongoing tax and labour market reforms and policies to facilitate the development of high-tech and fast growing enterprises, which should help promote investment and higher productivity growth, also need to be pursued. The opening of the capital of stateowned enterprises and their eventual privatisation, and planned improvements to governance structures should help promote growth, but revenues from sell-offs ought to be used to reduce debt. Finally, in order to better manage the totality of public expenditures, the authorities need to implement reforms that can be used to ensure that all spending organisms contribute to controlling spending. Here, it will be necessary to implement mechanisms that would improve the effectiveness of measures to control healthcare spending. Moreover, decision-makers need to be more directly confronted with the long-term consequences of their actions. Initiatives such as decentralisation and the new budget framework law should help in this regard. Pursuit of reforms along all of these lines should permit society to meet the fiscal challenge posed by population ageing, while retaining high levels of service.
Topic:
Diplomacy, Economics, International Organization, International Trade and Finance, and Political Economy
Political Geography:
Europe and France

2204. Economic Survey of Italy, 2003

Publication Date:
06-2003
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
The traditional dynamism and flexibility of the Italian economy has faltered in recent years, in part because of the unfavourable developments in the international economy. Furthermore, structural reforms have not yet gone far enough to turn the tide. Despite supportive fiscal policies and monetary conditions, growth is sluggish, confidence is at a low ebb, inflation is above the euro-area average, and there are perceptions of a pervasive loss of competitiveness. As regards fiscal policy, room for manoeuvre has now been greatly reduced by tax cuts – desirable in themselves – and significant additional corrective measures will be required for some years to come, if medium-term targets are to be achieved and long-term fiscal sustainability is to be assured. Such corrective measures should be of a structural and permanent nature, with prime candidates being savings in public pensions and health care, and increased public sector efficiency. The pension system is very expensive, in large part because it still encourages early retirement, thus resulting in inefficient public spending and low employment rates. These perverse features need to be removed. Public health spending is not efficiently administered: recent agreements on standards and financing with regions are a step forward, and a more incisive control of costs could derive from the quarterly monitoring of spending that has already been implemented. In public administration, the retirement of large numbers of public employees creates opportunities for a more effective and less costly redeployment of human resources. Overall economic performance would be improved by policies that further strengthen competition in product markets, for example by not eroding the powers and independence of the sectoral regulators. Privatisations should be vigorously resumed and effective financial market monitoring of firms ensured. Speedier bankruptcy procedures should be introduced that give priority to efficient reallocation of resources. Together with less rigid employment protection legislation, this might encourage more small firms to expand to levels that would permit more investment in both human and R capital. Recent employment developments have been positive, and further improvements could be achieved by encouraging the social partners to allow wages of workers of all ages to more closely reflect their productivity and local conditions. Planned improvements in the social safety net and the functioning of employment services should also boost job creation by making employees willing to accept more flexible employment conditions. In the longer term, increasing the levels of output and living standards will also depend on raising the skills and qualifications of Italy's labour force. Proposed educational reforms could improve them both and thereby help to realise Italy's full economic potential.
Topic:
Diplomacy, Economics, International Organization, International Trade and Finance, and Political Economy
Political Geography:
Italy

2205. From Red Tape to Smart Tape: Administrative Simplification in OECD Countries

Publication Date:
06-2003
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
One of the most common complaints raised by businesses and citizens in OECD countries is the amount and complexity of government formalities and paperwork. Enterprises and citizens spend much time and devote significant resources to activities such as filling out forms, applying for permits and licences, reporting business information, notifying changes etc. In many cases, practices have become extremely complex, or irrelevant and cumbersome, generating unnecessary regulatory burdens – so-called “red tape”. The costs imposed on the economy as a whole are significant. When excessive in number and complexity, administrative regulations can impede innovation, create unnecessary barriers to trade, investment and economic efficiency, and even threaten the legitimacy of regulation and the rule of law.
Topic:
Diplomacy, Economics, International Organization, International Trade and Finance, and Political Economy

2206. The OECD Guidelines for Multinational Enterprises: A Key Corporate Responsibility Instrument

Publication Date:
06-2003
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
The OECD Guidelines for Multinational Enterprises are one of the world's foremost corporate responsibility instruments and are becoming an important international benchmark for corporate responsibility. They contain voluntary principles and standards for responsible business conduct in such areas as human rights, disclosure of information, anti-corruption, taxation, labour relations, environment, and consumer protection. They aim to promote the positive contributions multinational enterprises can make to economic, environmental and social progress.
Topic:
Economics, Environment, Human Rights, International Organization, and International Trade and Finance

2207. MAgricultural Policies in OECD Countries: A Positive Reform Agenda

Publication Date:
06-2003
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
OECD countries have recently agreed to a positive reform agenda for agricultural policies. Central to this agenda is the need to set out clearly the objectives of agricultural policies, and to monitor the performance of alternative policies in attaining them. In most cases, the best way to achieve an objective is to target it directly. Thus, where agriculture is deemed to provide public services, such as a pleasing countryside or environmental benefits, any required support for those services could be provided directly, rather than through policies that stimulate output. Conversely, environmental degradation could be taxed or regulated at source. Where agricultural households have low incomes, there may be a case for policies that concentrate benefits among poorer households, as opposed to blanket support measures that pay more to larger (and typically wealthier) farmers and to landowners. Reform along these lines would improve the cost-effectiveness of government programmes, and would greatly reduce disruptions to international markets. At the same time, not everyone will gain from reform, at least in the short term. There may therefore be a need for temporary adjustment assistance for farm households that are negatively affected. The broader opportunities to improve economic well-being call for policies that respond explicitly to a more diverse range of societal interests.
Topic:
Agriculture, Economics, Environment, and International Trade and Finance

2208. Feasible Financing Strategies for Environmentally Related Infrastructure

Publication Date:
05-2003
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
An important obstacle to achieving environmental goals in many countries has been the failure to adequately address the associated financial issues: the costs of achieving goals; how those costs could be minimised; and the challenge of matching costs with available resources. The need for a fresh approach has become evident as central European countries come to terms with mobilising substantial financial resources to comply with challenging EU environmental requirements, and as the countries of Eastern Europe, Caucasus and Central Asia (EECCA) struggle to maintain even the low levels of services currently delivered by environmentally-related infrastructure.
Topic:
Economics, Environment, and International Trade and Finance
Political Geography:
Europe, Central Asia, and Eastern Europe

2209. Territorial review of Öresund,2003

Publication Date:
03-2003
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
The Öresund project which is intended to develop jointly Skåne (Malmö) in Sweden and Zealand (Copenhagen) in Denmark is a major endeavour for the Danish and Swedish governments, given the potential economic growth that can be derived from the integration of one of the most highly populated and productive regions on the Baltic Sea. The significance of the project is reflected not only in the regional policy focus given to Öresund in both countries but also in the EU's support, notably through INTERREG, which considers Öresund a flagship programme. While progress has been achieved to better link the two regional economies, much remains to be done to remove barriers to integration and to define the strategic positioning of the area for the future. Four key policy challenges need to be addressed. First, regarding physical accessibility, the pricing policy for the crossing of the new bridge can be made more efficient and secondary infrastructure optimised to fully exploit the opportunities brought about by the fixed link. A cross-border committee could be created to allow integrated spatial planning. Second, labour mobility should be increased by removing bureaucratic and legislation obstacles through a new package of active labour market policies. Third, networking and co-operation between firms and educational institutions should be enhanced. Fourth, asymmetries of the two fiscal systems will need to be tackled by a new tax agreement. Most important is the governance framework of the region. While there are numerous common Danish/Swedish regional institutions and rightfully the creation of a heavily bureaucratic governing body has been avoided, the potential for public/private partnerships is far from tapped. Furthermore, the system in place does not provide an appropriate framework for the private sector to fully involve all relevant actors. These conditions will need to be fulfilled and forms of “light institutionalisation” of cross-border relations developed in order to trigger a new dynamism in the integration process.
Topic:
Emerging Markets, International Trade and Finance, Political Economy, and Regional Cooperation
Political Geography:
Denmark and Sweden

2210. China and Southeast Asia: The Difference of a Decade

Author:
Catharin Dalpino and Juo-yu Lin
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
The Brookings Institution
Abstract:
Over a span of several years, China's relations with the nations of Southeast Asia have shifted in quiet increments. The accumulated effect, however, has been profound. A concerted diplomatic effort to woo countries of the Association of Southeast Asian Nations (ASEAN), which now includes all countries in the region excepting East Timor, has reaped multiple benefits for Beijing. It is beginning to alter the political balance in the region as alignments with extra-regional powers are shifting, however subtly. In some aspects, the change is more dramatic. Economic relations have expanded rapidly; for example, trade between China and Southeast Asia is seventeen times larger today than it was twenty-five years ago.
Topic:
Economics, International Political Economy, and International Trade and Finance
Political Geography:
China, Beijing, Asia, and Southeast Asia